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Consumer Scams

Authentic Vatican Guidebook! Used at the Holy See last March (2008). For sale for only $1-million! Cash preferred.

Consumer scams have been around as long as the Brooklyn Bridge has been sold.

Now, it's a whole cottage industry watched as close as can be done by law enforcement officers.

But these crooks know that the police are too busy working on other crimes and not always that keen on helping some sad sack who has been duped, especially when that sad sack is usually quite embarrassed about being fleeced and not too keen on going public.

Many consumers feel offers made to them must be legitimate; that they are protected by the law from consumer scams.

Scammers take full advantage of this comfort zone, often by presenting themselves as government - such as bogus income tax refund scams which present on fake letterhead of Canada Revenue Agency or the US Department of Justice (DOJ).

Motivated by money and a high success rate, the crooks very sophisticated, seemingly one stap ahead of law enforcement resources. They are particularly fond of victims with good credit ratings or those with less than a good command of the English language.

The classified section of every daily newspaper and the telephone posts downtown are well-stocked with consumer scam fishing baits and hooks.

Scams are designed to sting fast, get the money and move out, leaving no trace.

Because most consumer scam victims are embarrassed and take a long time to contact police. By the time the police move in, the warehouse is empty with no forwarding address and just a trail of false names.

The Advance Fee Scam

Many ads promise jobs or loans which start with you sending money in advance to a company.

Some use a 1-900 number. When you use a 1-900 number, you pay a high minute-by-minute rate to the party being called. In this way, the scam artist sucks in your money.

The Canadian RCMP describes the scam as:

"The consumer is encouraged, usually through an offer in the mail, to call a 1 900 number in order to find out how much money he or she has won. The implication is that you have won a large prize - cash, cars, boats etc., and your brief phone call will confirm which prize is yours. The offer usually states the cost of the call per minute - around $4.99 - and the average length of the call, which is usually 7 or 8 minutes. Most of these numbers are linked to a voice response system (a computer), which prevents you from speeding up the call. More often than not, the prize available is minimal (one or two dollars), and you will lose $35.00 for every call you make."

When the fish gets close to the net, some firms have been known to use a forged law firm cover letter. Others swamp the corporate registry office with incorporation applications which present the word bank in the name. Some get through such as Key Bank Corp. which the Government of Ontario had to later shut down for fear that the misleading title could be used for the purposes of selling mortgages or influencing land transfers.

The Urgent Business Transaction Scam

My personal favorite! Also known as the Nigerian letter scam or the 419 scam (after the number of the relevant Nigerian law), this scammer/spammer email usually says it comes from high placed government employee who is sitting on a wad of cash and ever so anxious to get it to you for safekeeping, for which you'll be promised a third.

If the consumer contacts the email writer, they will be intelligently coaxed into a high pressure request to send a processing fee, or bribe money, of thousands of dollars.

"If the victim pays the fee, there are often many complications which require still more advance payments until the victim either quits, runs out of money, or both."

You Won The Lottery! Scam

Another popular scam is the You Won The Lottery! email. Another similar variety of consumer scam is the You Won A Prize! (such as cash, travel or a new car).

Here is a real sample, complete with grammar errors:

"Please confirm your Micro Dayzers International Promotion. In line with the yearly sweepstakes of the above named organization held on the 14th of May,2009. It is our pleasure to inform you that your e-mail address: (I) Award numbers: TL 22/15409; (ii) Email ticket number: TL754/22/76; (iii)Lotto code number: TL09622NL; (iv) The file Ref number: TL/0534/30/05, came up in the first category. This invariably means that you have emerged as the prize recipient in the first category with an allocated sum of: 2,000.000.00 euro (Two Million euro only).

You have to be particularly naive to be hit by this scam since lottery companies do not notify winners by email nor, by definition, can you win a lottery without first buying a ticket!

In this scam, the recipient is encouraged to be discreet about winning. If the consumer takes the bait and replies to the scam a telemarketer calls and you are asked to pay "taxes" up-front c/o the scammer, or make some kind of security deposit.

Or you are told that you have to purchase a product (such as a coin collection or pen set) to receive your prize.

Pyramid Schemes

According to the Royal Canadian Mounted Police (RCMP):

"Pyramid schemes are frauds that are based on recruiting an ever-increasing number of investors. The initial promoters (those at the peak of the pyramid) recruit investors who are expected to bring in more investors, who may or may not sell products or distributorships. Recruiting newcomers is more important than selling products.

"No new money is created in pyramid schemes. Investors who get in early take their profits from investors who join later. At some point, no new investors can be found and as a result the last investors, who are at the bottom of the pyramid, lose their money. They also face prosecution, as pyramid schemes are illegal."

Like an ever-increasing throng of lemmings marching to the sea, the pyramid continues until it collapses, the initiators long gone with the money.

Work-At-Home Scam

The work-at-home scam plays off stay-at-home mothers and seniors with a bit of spare time at home. The advertisement offers either an easy and allegedly high-paying job - such as envelope stuffing or typing - which you can do at home, or a can't miss business opportunity.

There are, of course, some very legitimate work-from-home opportunities out there but you can tell a scammer by the demand for an inordinate sum of money up front for employment supplies or an initiation fee.

Once baited, the consumer is asked for some money up-front and after making that payment, the employer is never heard from again and is untraceable.

The Great Sex Pill Scam

The scammers offer pharmaceutical products, many promising to increase a recipient's sex drive. The scammer asks for personal identity information (which can be used for identity theft), and an up-front fee saying it is either a doctor's consultation fee or a processing fee.

Perhaps, ironically, the scariest part of this scam is that it's not a complete scam in that the consumer may well receive a medical drug in the mail - made in China - and swallow it!

"It is a violation of the Federal Food, Drug and Cosmetic Act (Title 21, Chapter 9 of the United States Code) to dispense prescription drugs without a valid prescription. Even if you do have a prescription, be leery of fraudulent online pharmaceuticals. Many Internet pharmacies do not adhere to state licensing requirements and standards, which allow consumers to obtain prescription drugs without a prescription or physician’s approval. Often the origin of the prescription drug is unknown, increasing the likelihood of consumers receiving counterfeit, tainted, and diluted pharmaceuticals. Most of the fraudulent online pharmacy cases being investigated by law enforcement involve the sale of counterfeit pharmaceuticals to purchasers."

Fighting Back

Consumer scammers are good. They are trained, experienced, persistent and confident con artists.

Here are some tools to help you fight back:

Watch for gramar and spelling errors in incoming emails that announce something. Good companies are careful about their copy. Con men and women who live in foreign countries are careless about grammar and punctuation.

Make direct and forceful inquiries as to the company behind the suspect offer including a website. Consider the math: most scammers do not have a website; most reputable companies do.

Do not give out, by phone, to an employee of some company that you do not know, and personal information such as bank acount numbers and birth dates.

Don't pay for services before they are delivered.1

If there is a time-pressure applied to you, recognize that as a sure sign of something fishy. Except for an ambulance attendant, no legitimate business will ever pressure you to make a snap decision.

Buy a shredder and shred document that have personal information such as credit and bank account statements, or arrange to receive them by email. Shredding has the added advantage of making paper waste more readily recycled.

Look at your monthly credit card and bank account statements for unrecognized payments. Scammers often start with small withdrawals or payments to see if the card owner is monitoring, before going for the home run.

Oh, and by the way, if you wanted that Vatican Guidebook, it's still for sale!

REFERENCES:

Note 1: this may sound a bit hypocritical for a lawyer to say since we ask for retainers before rendering legal services! The right to demand a retainer by lawyers is usually recognized in statute or some regulatory instrument or the by-laws of a lawyer organization.

LAWimage

Duhaime Lawisms

Everybody is supposed to know the law except Her Majesty's judges who have a Court of Appeal set over them to put them right.
Glanville Williams, Criminal Law, General Part (1953), p. 386.

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.